PI
insurance is simply another name for professional indemnity
insurance.
This insurance
is mandatory for some professional occupations and voluntary for
other professions. Therefore it is a matter of risk management as to
whether you decide to take out PI insurance.
Obviously
the larger the risk against a claim being made against you or your
company then it is probably more worthwhile to take out a level of
professional indemnity insurance. Likewise, if the amount of money
for a claim against you is relatively large then there is even more
incentive to take out PI insurance for either you or your company. It
is this balance between the risk of a claim being made against you
and the risk of the amount of the claim which should determine
whether it is prudent to take out PI insurance or not.
Traditionally
it has been that professionals such as solicitor's, Engineers,
architects, doctors and lawyers to name a few were the ones to take
out insurance for the services they provided. However in today's
litigious environment it is prudent for non-traditional service
providers to consider obtaining insurance for the services they
provide to their clients.
For
example, there have been a number of cases where website designers
have been sued for the services provided to their clients. This
profession is almost completely different from the traditional
professions usually covered by such insurance policies.
If you
decide to take out insurance for the services you provide then it is
important to understand what your insurance policy includes and
covers and what it excludes. The reason for this is that not all
insurance policies are the same and cover different elements that you
may or may not be covered against in the circumstance of a claim
against you.
The
particulars of the policy will also cover you for different levels of
cover. Generally the higher the insurance premium you pay the more
you will be covered against and generally the more terms you will be
covered against.
This is
an important point because if you do not understand what it is that
you are covered against then you may face a claim against you that
you may think you are covered against. However generally the larger
the premium you pay to your insurance company then the more you will
be covered against.
Initially
when you start researching it can be confusing to know what PI cover
you should select for your particular circumstances. There are a
number of different elements within each policy and it can be a
confusing affair. That is why it is sometimes the best idea to
consider utilizing the services of an insurance broker.
Insurance
brokers are able to relatively quickly go through the particulars of
the insurance policy and determine whether the coverage is relevant
to what your insurance needs are. These brokers will usually also
know about a number of different policies on the market and be able
to point you in the direction of the best policy for your
circumstances.
Insurance
brokers will usually take a commission for the service they provide
however they can also save you a lot of time because they typically
know what insurance policies are offered for professional services.
Depending on the professional services you provide, the insurance
brokers will usually be able to select the right insurance policy for
your circumstances. This can make choosing a policy for your
particular requirements an easier task because it will save you a lot
of time reading the fine print within each policy that you wish to
review.
That is
not to say however that you should not read up on the fine details
within the insurance policy that you decide to take out to protect
yourself. The brokers are merely a middle man and usually only offer
general advice as to the particulars of the policy that you are
considering.
However,
it is important to take the time to review the insurance policy that
you ultimately choose. The reason for this is that you will then know
what is included and what is excluded in the event of a claim.
Knowing
what is included and what is excluded within your policy is essential
if you are offering professional services in a particularly litigious
environment. That is because if you know what you are protected
against then you will be more likely to know what you should include
in the documentation that you provide to your clients.
Having
PI insurance is perhaps one of the wisest actions you can do to
protect yourself against claims for the professional services you
provide to your clients. The reason for this is that you are able to
mitigate your risk in the event of a claim against you. However, it
is important to review the policy in detail before locking yourself
in so that you are aware of what is included and what is excluded
from the policy that you take out.